Bitcoin Selloff Accelerates as AI Fears and Rate Hike Bets Weigh

Bitcoin (BTC) declined 2.5% to $60,954.60 by 17:39 ET on Wednesday, extending recent losses as concerns over high U.S. interest rates and waning investor interest kept cryptocurrency markets in the red.

The world's largest crypto was hit by a wipeout in the artificial intelligence trade that extended from Tuesday into Wednesday, leaving investors skittish towards risk-driven assets.

'The global tech stock selloff of the last 24 hours has coincided with another bout of de-risking out of digital assets,' said Thahbib Rahman, research analyst at Block Scholes. 'Fears over lofty AI valuations and concerns around AI spending have driven risk-off moves in U.S. equities, and those risk-off moves have coincided with a selloff in Bitcoin (BTC) and crypto.'

Crypto markets also remained on edge due to higher for longer U.S. interest rates following hawkish signals from the Federal Reserve meeting last week.